100 Cents on the Dollar — and Not a Single Asset Sold
The world's largest Jiffy Lube operator — profitable, but over-leveraged and pushed toward collapse by a viral exposé and a franchisor moving to terminate its agreements. Recruited as CFO and promoted to President & CEO at the low point of the crisis, Eric Glover led a strategic Chapter 11 that preserved the franchise, rationalized the footprint into a stronger going concern, and paid every creditor 100 cents on the dollar — without selling a single asset.
12.5 Months From Petition to 100% Confirmation
Profitable, Not Broken — Then Pushed Toward Collapse
Heartland was the world’s largest Jiffy Lube operator: 439 stores, 20% of the system, across 20 states, with 6,000 teammates and ~$300M in sales, at ~$36M EBITDA on a 12% margin. Then a viral Los Angeles television exposé hit a single district, and the brand damage spread fast.
Take Command, Then Reorganize as a Stronger Going Concern
Eric Glover, Managing Director, served as CFO and then President & CEO — taking command mid-crisis with full accountability for the turnaround. Rather than sell, he pursued a plan of reorganization that kept the chain open and operating while using the Chapter 11 process to rationalize the footprint.
The turning point was the Castrol gambit. With the franchisor and oil supplier refusing to negotiate, Heartland put all 439 stores up for bid and signed a binding deal with Castrol to rebrand the entire chain. The signed deal was worth far more as leverage than it would ever have been as a transaction — it brought both counterparties back to the table within 24 hours.
Rebuilt the Franchisor Relationship
Preserved the franchise agreements, with a mutual release and a five-year growth mandate, reorganizing as a stronger going concern with no asset sale.
Recut the Supply Agreement
Negotiated $16M of supplier incentives, most-favored-nation oil pricing (a projected $25M over five years), and vendor-managed inventory.
Recapitalized & Rationalized
Secured $28M of fresh capital, converted $67M of subordinated debt to equity, shed weak stores (439 to 397), and rolled out chain-wide operational excellence.
Operational Excellence
Standardized operating processes and procedures across the chain and developed a Leadership Excellence program to ensure the incident could never recur.
Every Creditor Paid in Full — and the Franchise Preserved
Confirmed in 12.5 months — through a global financial crisis — with every class paid in full and no asset sale. Heartland emerged as the nation’s largest Jiffy Lube franchisee, with a growth mandate.
$28M of new capital plus $67M of sub-debt converted to equity; $28.5M of NOLs preserved; positive equity restored. Creditors recovered in full, junior capital rolled to equity at par, and the sponsor retained ownership and 3x of upside.
Under Eric’s leadership as CEO, average ticket grew from $55 to $65 with no added sales pressure; +12.6% gross profit per car; record 91.5% guest satisfaction; specialty oil grown from 40% to 55% of sales.
Operating processes and procedures were standardized across the chain, with a Leadership Excellence program developed and implemented to protect the brand going forward.